In 2009, the former Labor Rudd Government made the stupid decision to allow temporary migrants to purchase established Australian homes.
The key changes made regarding property purchases by temporary migrants are outlined below:
Second-Hand Residential Dwellings
Temporary Residents
Temporary residents are not required to notify FIRB of the acquisition of one second-hand residential dwelling. However, the dwelling must be used as the temporary resident’s own residence (not for investment purposes).
Definition Of ‘Temporary Residents’
The definition of ‘temporary residents’ permitted to acquire second-hand residential dwellings has been expanded to include all foreign persons living in Australia who hold a valid visa that permits them to stay in Australia for a continuous period of more than 12 months (regardless of the time remaining until that visa expires). The definition now also includes foreign persons holding a bridging visa that permits them to stay in Australia pending an application for permanent residency (foreign persons holding bridging visas were previously excluded). This does not include short-term visitors on tourist visas, some types of business visas and persons in Australia for medical procedures. However, it does include a wholly owned trust or Australian incorporated company of the temporary resident.
Foreign Students
Foreign students may acquire second-hand residential dwellings of any value (previously limited to $300,000). However, FIRB approval is still required.
Vacant Residential Real Estate
Temporary Residents
Temporary residents are not required to notify FIRB of proposed acquisitions of single blocks of vacant residential real estate.
New Residential Dwellings
Temporary Residents
Temporary residents are not required to notify FIRB of proposed acquisitions of any new residential dwellings.
Australia has experienced an explosion in temporary migrants living in Australia, with 2.3 million on hand (excluding visitors) as of September 2023. This means that around one in every 11 people living in Australia hold a temporary visa:
Not surprisingly, interest in Australian property (both to buy and rent) is surging, according to PropTrack. This is being led by China, which recently ordered students to return to face-to-face teaching:
The boom in foreign purchases of Australian property can be traced back to two main causes:
- The boom in international students entering Australia; and
- The former Rudd government’s decision in 2009 to allow temporary migrants to purchase existing homes.
If Labor is not going to cut the migrant intake directly (including by capping temporary visa numbers), it should at the very least ban temporary migrants from purchasing existing dwellings in Australia.
A temporary migrant is supposed to be “temporary”. So, why is the federal government allowing them to purchase established homes and depriving Australians of owner-occupier housing in the process?
Most nations have strict rules precluding foreign purchases of real estate, particularly from temporary migrants. Australia should follow suit.
